Tuesday, March 03, 2015

Down And Out In Hartford

Shortly after Governor Dannel Malloy presented his budget to
the Democratic dominated General Assembly, a cataract of critical comments
washed over his administration.

Noting the governor had passed along to the legislature a
highly problematic budget, one commentator sniffed, “If the state budget is a
football game, rather than a tragi-comic version of naked beer pong, then
Gov. Dan Malloy admitted the other day to punting on third down at
the bank robbery.” No compliment was intended.

When Mr. Malloy’s budget guru Ben Barnes presented himself
for flack-catching before the Legislature’s Finance Committee and was asked why
Mr. Malloy was raising revenue from Connecticut’s beleaguered hospitals to plug one of the administration's frequent budget holes, he replied, echoing bank robber Willy Sutton, “Because
that’s where the money is.”

Weeks earlier, a for-profit company had proposed to take
over a handful of foundering hospitals in Connecticut with a view to making
them economically whole, but the bid was torpedoed by the state’s union-friendly Office of Health Care Access, and the hospitals
were “hung out to dry,” as Willy Sutton might have said.

His budget, Mr. Malloy boasted, was true to his often
repeated campaign promise of no new taxes, Connecticut’s depressed economy was
on the mend, and sunny blue skies were hoving into view just around the
corner.

None of this, at it happened, was true. Tax revenues were
increased, some say by nearly a billion dollars. No doubt pecksniffs will
quarrel over the term “tax increase,” but the total amount of revenue pouring
into the state’s already swollen tax coffers will increase, which means that
the total amount of revenue available to businesses and the middle class in
Connecticut will decrease by a proportionate amount.

During the past twenty-four years, citizens and businesses
in the state have suffered two major tax increases: an income tax, Governor
Lowell Weicker’s legacy to his state, and Governor Malloy’s broad based tax
increase of 2011, the largest tax increase in state history. Sounding a warning
bell at the time, the indispensable
Yankee Institute made a meticulous record of Mr. Malloy TWENTY-ONE TAX INCREASES,
to little avail. Since the preceding Democratic governor left office, the state budget has increased
threefold, a measure of the state’s alarming propensity to spend its way to a
prosperity that never arrives. Budget deficits have continued to increase in tandem
with spending increases – very likely because gargantuan tax increases, strangling
regulations and Mr. Malloy penchant for crony capitalism has produced entrepreneurial
flight and anemic growth. Mr. Malloy’s budgets always have been wobbly, and
repeated rescissions have not made them less so.

There is no appetite within Connecticut’s progressive one
party state for spending decreases that are not cosmetic and temporary. Increasing
the retirement age for state workers would reduce salary and benefit spending
in the long term for future generations of taxpayers who will be expected to
shoulder Mr. Malloy’s exorbitant $100 billion, thirty year infrastructure
repair program. That program alone will narrow the scope of spending reductions
for future governors. Privatizing appropriate state functions, however
disappointing to unions, would relieve tax pressure on future taxpayers and at
the same time send a clear signal to out of state businesses looking through
Connecticut's windows that the high tide of state spending will slowly recede;
changing the state’s benefits programs from defined benefit plans, operative for most state workers, to defined contribution
plans, available to unclassified employees at any units of the Connecticut
State System of Higher Education, would have the same beneficial effect. Many
people do not recall that Mr. Malloy, recently elected as governor, proposed a
measure that would have allowed him to privatize certain state functions early
in his first term in office; naturally, he was rebuffed by a Democratic
dominated General Assembly tied to the apron strings of state unions. Mr. Malloy has long since -- and willingly -- been ensnared in the same trap.

With the exception of eleven seats won in the last election
by Republicans, Mr. Malloy has now tossed his out-of-balance budget to the same tax prone big spenders: "We
got it off my desk," he said. "It's now into the Legislature. I had
no expectations two weeks ago that they would adopt my budget as I presented
it. There are always lots of changes. They're required to set a balanced budget
that's under the spending cap."

To which one might ask – What spending cap? The spending cap
was a feature added to then Governor Weicker’s proposed income tax measure as
bait to attract support in the General Assembly from what we here might call
Ella Grasso income tax opponents, most of them moderate Democrats.
Implementation legislation was never enacted. In the absence of implementation
legislation, hedonist spenders have been able for twenty-five years to avoid the
sharp claws of the ever adjustable spending cap.